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4. After hearing the parties, the Additional Commissioner of Sales Tax held that the process of dyeing and printing involves transfer of property in goods and, therefore, the respondent engaged in the business of dyeing and printing is a dealer within the meaning of Section 2(1)(d) of the Works Contracts Act and is liable to pay tax. The Commissioner, however, held that in the process of bleaching, no transfer of property in goods is involved.

5. Being aggrieved by the aforesaid order passed under Section 52 of the BST Act, read with Section 9 of the Works Contracts Act (in so far as it pertains to dyeing and printing is concerned), the respondent filed an appeal before the Sales Tax Tribunal. After hearing the parties, the Tribunal held at para 18 of its judgment that though there was transfer of property in goods, the same being too insignificant to take any cognisance, the provisions of the Works Contracts Act are not attracted. In addition to the above, the Tribunal further held, that from the contractual relations of the parties, it is evident that the contractee is not interested in transfer of the materials used in dyeing and printing, either as goods or in any other form and hence tax is not leviable on those materials. On a reference application filed by the Commissioner, the Tribunal has referred the aforesaid questions for the opinion of this Court.

17. Mr. Joshi referred to the decision of the apex Court in the case of State of Maharashtra v. Sarvodaya Printing Press Fine Art Printer reported in [1999] 114 STC 242. In that case, the respondent who ran a printing press, entered into an agreement with the Madhya Pradesh Electricity Board for the supply of "revenue money receipt book" at the rate of Rs. 8.88 per receipt book. It was held in that case that the paper and ink used in the process were the property of the respondent before printing but after printing, they became the property of the Board. It was held that the property in those goods, i.e., the paper and ink which was passed on to the Board, was only incidental or ancillary to the contract of printing and, therefore, it was not a case of sale but a works contract and hence sales tax was not leviable under the Bombay Sales Tax Act.

32. In the present case, the principal question that falls for consideration is, whether the coloured shade/print passed on to the fabric in the course of dyeing and printing amounts to transfer of the property of the materials used in dyeing and printing within the meaning of the Works Contracts Act. There can be no dispute that in a dyeing/printing contract, the dominant intention of the parties is to transfer the requisite coloured shade/print on the fabrics supplied by the customer. How the coloured shade/print is to be passed on to the fabrics and what ingredients or materials should be used for obtaining the requisite coloured shade/print may not be specified in the contract. Prior to the Forty-sixth Amendment to the Constitution, in the absence of specific contract for transfer of such materials used in the execution of a works contract (either in their usual form or in some other form), it could not be said that there is sale of the materials used in the execution of a composite works contract. However, by the Forty-sixth Amendment to the Constitution, the concept of "sale" has been altered and by a deemed fiction, the materials used in the execution of a works contract which are passed on either in its original form or in some other form are brought within the meaning of the term "sale". According to Mr. Joshi, unless the materials used in dyeing and printing pass in some or the other physical form, there is no passing of property in goods. In other words, according to Mr. Joshi if the property in goods passes as a result of some chemical reaction, then such passing of the property in goods is by accretion and not by transfer of the property in goods. The arguments put forth by Mr. Joshi can be best understood by referring to the different forms of water (as and by way of analogy), as stated hereinbelow :

38. The ratio laid down by this Court in the case of R.M.D.C. Press Pvt. Ltd. [1999] 112 STC 307 has no precedential value in view of the decisions of the apex Court in the case of Sarvodaya Printing Press [1999] 114 STC 242 and the Constitution Bench (three-Judge Bench) decision in the case of Associated Cement Companies Ltd. [2001] 124 STC 59. In the case of R.M.D.C. Press [1999] 112 STC 307, this Court took the view that the ink is a tool of the printer and the same is consumed in the process of printing and looses its identity as goods and, therefore, no property can be said to pass in ink used in the execution of the contract of printing. This finding is contrary to the Full Bench decision of this Court in the case of Sarvodaya Printing Press v. State of Maharashtra reported in [1994] 93 STC 387, wherein it is held that the paper and ink used in printing passes to the customer after printing and become the property of the customer by theory of accretion. The Full Bench decision of this Court has been upheld by the apex Court which is reported in State of Maharashtra v. Sarvodaya Printing Press Fine Art Printer [1999] 114 STC 242. Therefore, the decision in R.M.D.C. Press case [1999] 112 STC 307 rendered by the division Bench without considering the Full Bench decision of this Court in the case of Sarvodaya Printing Press [19941 93 STC 387, (which was binding on the Division Bench), must be held to be per incuriam. Once it is held that the property in goods used in the execution of the works contract passes incidentally or by theory of accretion, such passing, though not a sale under BST Act, would be deemed sale under the Works Contracts Act. In the present case, as the property of the materials used in the process of dyeing and printing are passed on to the customer in the form of coloured shade and such passing amounts to sale, the provisions of the Works Contracts Act are attracted.